Thweatt v. Freeman

• Decision Date: 14 January 1905
• Citation: Thweatt v. Freeman, 73 Ark. 575, 84 S.W. 720 (Ark. 1905)
• Parties: THWEATT v. FREEMAN
• Court: Arkansas Supreme Court

84 S.W. 720

73 Ark. 575

THWEATT v. FREEMAN

Supreme Court of Arkansas

January 14, 1905

Appeal from Prairie Chancery CourtJOHN M. ELLIOTT, Chancellor.

Affirmed.

On February 14, 1900, H. V. Freeman, executor of the will of O H. Platt, filed a bill in equity against J. G. Thweatt, R. H Sanders and S. A. Apple, alleging: That Thweatt is a lawyer and real estate dealer at Devall's Bluff, and that he was on September 18, 1897, acting as agent and attorney of plaintiff.That as such attorney Thweatt had charge of the estate of O. H. Platt, consisting of notes and a judgment aggregating $ 3,556.96, and certain lands which were described and were alleged to be worth $ 1,200.That previous to the above date Thweatt had collected on the notes and judgment the sum of $ 2,259, and held notes for $ 426, which he afterwards collected.That, instead of reporting said collections to plaintiff and remitting the same, said Thweatt retained them, and concealed the fact from plaintiff.That plaintiff urged Thweatt to make said collections, but to no avail.That in February, 1897, Thweatt wrote plaintiff to find out what he would take for the entire Platt estate in Arkansas, saying that an unnamed "moneyed man" had given him to understand that he would pay $ 2,000 cash for the entire estate.That plaintiff would not agree to take that amount, thinking the estate was worth more, but asked Thweatt to make a statement of the assets of said estate, to enable plaintiff to put a price on the property.That on September 18, 1897, Thweatt made out a sworn itemized statement, by which it appeared that the entire estate was worth only $ 2,000, but made no report of collections then in his hands.That plaintiff, being wholly unable to realize anything on said notes and judgment, and relying upon Thweatt's statement, agreed to take $ 2,000 for said property if the purchaser would pay Thweatt's commissions.That Thweatt said that the purchaser would pay his commissions, and sent a deed conveying the property to S A. Apple, who, Thweatt said, was the purchaser.That Apple was a stenographer in Thweatt's office, who knew all the circumstances.That Apple afterwards, at Thweatt's request, conveyed all said property to Thweatt and Sanders.That Apple paid nothing on the purchase, but acted as purchaser merely to accommodate Thweatt.That plaintiff is informed that Sanders afterwards conveyed said property to Thweatt, but no deed is of record.That at the time Thweatt made the statement as to the value of said property, it was worth $ 5,000, instead of $ 2,000, as represented by him.That, by concealing the collections and misrepresenting the value of the property, Thweatt deprived plaintiff of property worth $ 3,000.The bill concludes with a prayer that the deeds from plaintiff to Apple, from Apple to Thweatt and Sanders, and from Sanders to Thweatt (if there be such a deed) be cancelled; that plaintiff recover from Thweatt all amounts collected by him, less reasonable commissions and fees, and for other relief.

It was proved that, at the time Thweatt made a statement that the estate was worth only $ 2,000, he had $ 928 in his hands which he had collected for the estate, but failed to disclose to plaintiff.He also failed to disclose that Apple was purchasing for the benefit of himself and Sanders.

The chancellor found that, at the time of the conveyance of the property and assets of the estate of O. H. Platt, deceased to defendant Apple, defendantJ. G. Thweatt was the agent and attorney for plaintiff; that the defendant Apple was not a bona fide purchaser of said assets for value, but that the said conveyances were taken in his name for convenience and for the benefit of defendants Thweatt and Sanders, who were not innocent purchasers for value.It was therefore decreed that said Thweatt and Sanders reconvey to plaintiff all of the real estate described in the complaint, "within thirty days from this date; and if said deed be not made within said time, this decree shall operate as a reconveyance and cancellation of the deeds and conveyances set out in the complaint or any other right of title defendants may have acquired or conveyed prior to the expiration of said thirty days; and, in so far as these defendants or any one claiming under or through them are concerned, the title to said property is quieted in plaintiff; and that the plaintiff have and recover of and from the defendantJ. G. Thweatt the sum he collected for said estate and held in trust for the plaintiff, amounting to $ 4,215.96, less his fees and credits which he is entitled to, amounting to $ 3,207.59, leaving a balance of $ 1,008.37, for which execution may issue.

"It is further ordered and decreed that the defendant, R. H. Sanders cancel and satisfy the sum of $ 493 of the principal of the note and mortgage given by J. M. McClintock to him for $ 653.25 on the 30th day of July, 1898, said satisfaction or cancellation to be made of the date said note and mortgage was given, this amount being included in the above credit of $ 3,207.59, and said amount is to be paid by the said J. M. McClintock to the plaintiff as part of the said assets, and that defendant pay the costs of this suit."

Other facts necessary to its understanding are stated in the opinion.Defendants Thweatt and Sanders have appealed.

Decree affirmed.

J. H. Harrod, for appellants.

The rule of law governing the relation of attorney and client in matters of purchase from the client is that the purchase is valid if made in good faith.Story, Agency, § 212;Story, Eq. Jur., §§ 310-313.

J. M. McClintock and Eugene Lankford, for appellee.

OPINION

MCCULLOCH, J.

It is not difficult to find in the books a plain declaration of the duty owing by an attorney to his client and the principles governing the dealings between them."It is obvious," says Judge Story, "that this relation must give rise to great confidence between the parties, and to very strong influences over the actions and rights and interests of the client.The situation of an attorney or solicitor puts it in his power to avail himself, not only of the necessities of his client, but of his good nature, liberality and credulity, to obtain advantages, bargains, and gratuities.Hence the law, with a wise providence, not only watches over all the transactions of parties in this predicament, but it often interposes to declare transactions void which between other persons would be held unobjectionable.It does not so much consider the bearing or hardship of its doctrine upon particular cases, as it does the importance of preventing a general public mischief which may be brought about by means secret and inaccessible to judicial scrutiny from the dangerous influences arising from the confidential relation of the parties.By establishing the principle that while the relation of client and attorney subsists in its full vigor the latter shall derive no benefit to himself from the contracts, or bounty or other negotiations of the former, it supersedes the necessity of any inquiry into the particular means, extent, and exertion of influence in a given case."Story'sEq. Jur., § 310.

The same learned author says further: (Section 311)"On the one hand, it is not necessary to establish that there has been fraud or imposition upon the client; and, on the other hand, it is not necessarily void throughout, ipso facto.But the burden of establishing its perfect fairness, adequacy, and equity is thrown upon the attorney, upon the general rule that he who bargains in a matter of advantage with a person placing a confidence in him is bound to show that a reasonable use has been made of that confidence; a rule applying equally to all persons standing in confidential relations with each other."

The doctrine is more concisely stated by a modern author as follows: "Equity regards the relation of attorney and client much in the same light as that of guardian and ward and will relieve a client from hard bargains or from any undue advantage secured over him by his attorney.And the client, in order to secure such relief, is not...